Human capital, pollution control, and endogenous growth (original) (raw)
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The role of human capital and development for pollution control : an endogenous growth model
2018
Human capital and technological change are key factors for the realisation of a sustainable growth path, particularly if production causes environmental pollution. We analyse an endogenous growth model with pollution and abatement. Human capital is used in the production sector as well as in pollution control. In the steady state, economic growth and the level of pollution are constant. The impact of technological change on the pollution level is shown to depend on the development stage of the economy. Less developed economies with a lower productivity level in the education sector benefit more from productivity improvements in the education sector which reduce the pollution level as a by-product. In contrast, more developed economies with a higher productivity level in the education sector experience stronger environmental improvements from technological change in the abatement sector. Higher quality in abatement activity allows for a decrease of abatement expenditures associated w...
Journal of Economics Zeitschrift f�r National�konomie, 1993
The effects of increased environmentai care on optimal technology choice and long-term growth are studied for an economy in which pollution is a side-product of physical capital used in production. First, it is shown that in case of a standard neoclassical production structure, the result is a less capital-intensive production process whereas the long-run growth rate is not affected. Next, we introduce assumptions of the endogenous growth literature. When there are constant returns to physical capital, an increase in abatement activities crowds out investment and lowers the endogenous growth rate. When human capital accumulation is the engine of growth, physical capital intensity declines and the endogenous optimal growth rate is unaffected by increased environmental care or is even higher, depending on whether or not pollution influences agents' ability to learn.
Polluting Non-Renewable Resources and Growth
Environmental and Resource Economics
In an endogenous growth model with human capital accumulation, we introduce non-renewable resources which cause flow pollution problems. In this set-up the negative external effect of pollution on productivity does not cause any distortions in the economy: The market economy will achieve the optimal extraction and growth rates. Consequently, emission taxes are unnecessary and, when introduced, will have no effect on the economy. The more important is the negative pollution externality, the larger will be the optimal long-run growth rate (which may be either positive or negative). In the case of a positive human capital externality, consumption in the market economy may approach zero in the long run, although positive consumption growth is socially optimal. Growth-enhancing policies do not necessarily cause a larger drain in the resource stock. Copyright Kluwer Academic Publishers 2000
Journal of Public Economics, 1995
This paper explores the link between environmental quality and economic growth in an endogenous growth model that incorporates pollution-augmenting technological change. It examines the conditions under which sustainable growth is both feasible and optimal. We explore also how the government should intervene to ensure the optimal levels of natural and knowledge capital, which share a publicgoods character. We establish the conditions for a more ambitious environmental policy to raise long-run growth.
Environmental policy in an endogenous growth model with human capital and endogenous labor supply
Economic Modelling, 2002
This paper analyses environmental fiscal policy within a two-sector endogenous growth model with elastic labor supply. Pollution is modeled as a side product of production. The framework allows us to analyze the consequences of an environmental tax on the economic dynamics. Both transitional dynamics and balanced growth path are computed and the response to an environmental tax change is explored. Short-and long-run welfare costs are also computed. We show that an environmental tax change induces a sharp contrast between short-and long-run effects. The magnitude of this contrast depends on the agents' aptitude to substitute studying time for leisure. ᮊ W. Oueslati . 0264-9993r02r$ -see front matter ᮊ 2002 Elsevier Science B.V. All rights reserved.
How policy can influence human capital accumulation and environment quality
This note shows that the assumptions about the abatement technology modify the impact of the environmental taxation on the long-run growth driven by human capital accumulation � la Lucas (1988), when lifetime is finite. Whereas no impact of the environmental policy on long-run growth is found when pollution originates from final output and abatement is an activity requiring final output to reduce net emissions, this note demonstrates that a tighter environmental tax enhances human capital accumulation when it is assumed that abatement services are produced with physical capital.
Environmental Pollution in a Growing Economy with Endogenous Structural Change
SSRN Electronic Journal, 2000
In this paper we study the impact of environmental pollution in an endogenous growth model that allows for structural change. The model is based on doublydifferentiated R&D where newer, less polluting technologies gradually replace older ones. The analysis shows that the presence of environmental externalities stimulates structural change but reduces the growth rate of the economy. Further, comparing the models with and without structural change demonstrates that the latter implies stronger environmental damages and, consequently, a lower growth rate than the first one. Finally, levying a tax on the polluting output speeds up structural change, thus, reducing environmental pollution and spurring economic growth. This can give new support for the double dividend hypothesis.
On the effect of technological progress on pollution: an overlooked distortion in endogenous growth
Oxford Economic Papers, 2013
Abstract We derive a model of endogenous growth with physical capital, human capital and technological progress through quality-ladders. We introduce welfare-decreasing pollution in the model, which can be reduced through the development of cleaner technologies. From the quantitative analysis of the model, we show clear evidence that the externality from technological progress to pollution considered in this model is sufficiently strong to induce underinvestment in R&D as an outcome of the decentralized equilibrium. An important ...
Endogenous growth effects of environmental policies
Panoeconomicus, 2015
To analyse the impact of the environmental policies, we start by reviewing the literature on the environment, technological knowledge and economic growth. Then, we build a general equilibrium endogenous growth model where final goods are produced either in the skilled-labour intensive Clean sector or in the unskilled-labour intensive Unclean sector. By solving numerically transitional dynamics towards the unique and stable steady state, we observe that environmental policies encourage scale-invariant technological knowledge bias. This, in turn, promotes environmental quality, the skill premium and economic growth. Moreover, the impact of population growth on the steady-state growth rate is higher under strong households? environmental conscientiousness with future generations.
Economic Growth and the Dynamics of Environmental Quality1
Empirical studies suggest the existence of an environmental Kuznets curve: In the initial stages of economic development pollution increases, but eventually the trend is reversed and environmental quality rebounds. Previous efforts to model this phenomenon have relied upon the restrictive assumptions of intergenerational conflicts, ill-defined property rights or higher pollution intensity of more productive capital. This paper develops a simple neoclassical growth model that is free from these assumptions and provides a more general explanation of the evolution of economic growth and environmental quality based on the relative scarcity of capital. The model's predictions are consistent with the environmental Kuznets curve and two other empirical regularities: (i) during the initial stages of economic development, growth is high but there is negligible regulation and expenditures on environmental protection so that pollution levels rise; (ii) at later stages of economic development, better environmental quality is actively pursued, so that pollution is reduced, and economic growth rates are lower. We also show how a pollution tax or tradable permits can only implement the social optimal if accompanied by other taxes on consumption or profits. We solve for the time when environmental quality starts to improve and analyze its determinants. (JEL O13, Q20)